Swot Analysis of "CEMEX (B): Cementing Relationships (2004-2007)" written by Rosabeth Moss Kanter, Pamela Yatsko, Ryan Raffaelli includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cementing Cemex facing as an external strategic factors. Some of the topics covered in CEMEX (B): Cementing Relationships (2004-2007) case study are - Strategic Management Strategies, Emerging markets, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the CEMEX (B): Cementing Relationships (2004-2007) casestudy better are - – wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing commodity prices, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, geopolitical disruptions, etc
Introduction to SWOT Analysis of CEMEX (B): Cementing Relationships (2004-2007)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEMEX (B): Cementing Relationships (2004-2007) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cementing Cemex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cementing Cemex operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of CEMEX (B): Cementing Relationships (2004-2007) can be done for the following purposes –
1. Strategic planning using facts provided in CEMEX (B): Cementing Relationships (2004-2007) case study
2. Improving business portfolio management of Cementing Cemex
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cementing Cemex
Strengths CEMEX (B): Cementing Relationships (2004-2007) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cementing Cemex in CEMEX (B): Cementing Relationships (2004-2007) Harvard Business Review case study are -
Successful track record of launching new products
– Cementing Cemex has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cementing Cemex has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Cementing Cemex is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Cementing Cemex has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in CEMEX (B): Cementing Relationships (2004-2007) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Cementing Cemex
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cementing Cemex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Cementing Cemex in the sector have low bargaining power. CEMEX (B): Cementing Relationships (2004-2007) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cementing Cemex to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the CEMEX (B): Cementing Relationships (2004-2007) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Cementing Cemex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cementing Cemex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Cementing Cemex in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Cementing Cemex are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Cementing Cemex is present in almost all the verticals within the industry. This has provided firm in CEMEX (B): Cementing Relationships (2004-2007) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Cementing Cemex is one of the most innovative firm in sector. Manager in CEMEX (B): Cementing Relationships (2004-2007) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– CEMEX (B): Cementing Relationships (2004-2007) firm has clearly differentiated products in the market place. This has enabled Cementing Cemex to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Cementing Cemex to invest into research and development (R&D) and innovation.
Weaknesses CEMEX (B): Cementing Relationships (2004-2007) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEMEX (B): Cementing Relationships (2004-2007) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study CEMEX (B): Cementing Relationships (2004-2007), it seems that the employees of Cementing Cemex don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cementing Cemex supply chain. Even after few cautionary changes mentioned in the HBR case study - CEMEX (B): Cementing Relationships (2004-2007), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cementing Cemex vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Cementing Cemex has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow decision making process
– As mentioned earlier in the report, Cementing Cemex has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cementing Cemex even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Cementing Cemex is dominated by functional specialists. It is not different from other players in the Global Business segment. Cementing Cemex needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cementing Cemex to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Rosabeth Moss Kanter, Pamela Yatsko, Ryan Raffaelli suggests that, Cementing Cemex is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study CEMEX (B): Cementing Relationships (2004-2007) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case CEMEX (B): Cementing Relationships (2004-2007) can leverage the sales team experience to cultivate customer relationships as Cementing Cemex is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study CEMEX (B): Cementing Relationships (2004-2007), it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CEMEX (B): Cementing Relationships (2004-2007), is just above the industry average. Cementing Cemex needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cementing Cemex is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CEMEX (B): Cementing Relationships (2004-2007) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Cementing Cemex has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities CEMEX (B): Cementing Relationships (2004-2007) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study CEMEX (B): Cementing Relationships (2004-2007) are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cementing Cemex in the consumer business. Now Cementing Cemex can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Cementing Cemex to increase its market reach. Cementing Cemex will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cementing Cemex can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cementing Cemex can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Cementing Cemex can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Cementing Cemex has opened avenues for new revenue streams for the organization in the industry. This can help Cementing Cemex to build a more holistic ecosystem as suggested in the CEMEX (B): Cementing Relationships (2004-2007) case study. Cementing Cemex can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Cementing Cemex can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cementing Cemex can use these opportunities to build new business models that can help the communities that Cementing Cemex operates in. Secondly it can use opportunities from government spending in Global Business sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cementing Cemex can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Cementing Cemex has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cementing Cemex to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cementing Cemex can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, CEMEX (B): Cementing Relationships (2004-2007), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cementing Cemex can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Cementing Cemex can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats CEMEX (B): Cementing Relationships (2004-2007) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEMEX (B): Cementing Relationships (2004-2007) are -
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cementing Cemex can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cementing Cemex business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Cementing Cemex demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cementing Cemex with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Cementing Cemex
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cementing Cemex.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cementing Cemex in the Global Business sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CEMEX (B): Cementing Relationships (2004-2007), Cementing Cemex may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Stagnating economy with rate increase
– Cementing Cemex can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cementing Cemex in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Cementing Cemex high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cementing Cemex needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Cementing Cemex has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Cementing Cemex needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of CEMEX (B): Cementing Relationships (2004-2007) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study CEMEX (B): Cementing Relationships (2004-2007) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study CEMEX (B): Cementing Relationships (2004-2007) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study CEMEX (B): Cementing Relationships (2004-2007) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of CEMEX (B): Cementing Relationships (2004-2007) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cementing Cemex needs to make to build a sustainable competitive advantage.